Client is an owner managed company - 1 director who holds 100% shareholding. Director regularly puts through personal expenditure on a loan account. At 31/10/16 loan was £20k overdrawn. He plans to repay the company £15K within 9 months from own resources (not dividends). Will section 455 tax therefore be based on £5k (£20k less £15k repaid) at 32.5% even though the loan has increased through additional personal exepnditure debited to loan after 1/11/16 and will continue to increase with additional drawings debited after the £15k is repaid ?
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What of it? A mere intention to draw further sums in the future does not amount to arrangements in place at the time of the repayment (though I guess that HMRC may try and argue otherwise). But he'll need to consider whether ss(1) is in point.
How do you know that? Are you party to relevant information that is not in the question? Or just making unstated assumptions?
This is just an internet forum.
You can only make replies on the basis of the information made available.
In which case, on the basis of the information provided, the only correct answer is "I don't know". "Yes" (or "No") requires assumptions to be made.
To limit it to the preceding 30 days (rather than back to 1 Nov 2016), does the company need to be able to show that the repayment relates entirely to the debt as at 31 Oct 2016?